China’s Q3 GDP to guide trading

Trading at the Philippine stock market is expected to be influenced by fresh news from China, specifically third quarter economic data due to be released today.

“This week, we expect investors to stay on the sidelines in anticipation of the GDP [gross domestic product]release of China,” BPI Asset Management said in a weekly market outlook.

“The PSEi [Philippine Stock Exchange index] should trade between 6,900 and 7,200, but should be heavily dependent on how the GDP numbers of China would fare compared to consensus estimates of 6.8 percent,” it added.

Investors will be looking at China’s third quarter GDP results given the economic powerhouse’s contribution to the global economy. Markets fell last week as weak trade data underscored a slowdown in the Chinese economy.

AB Capital Securities Inc. also noted the likely impact of China’s GDP figures and added that other indicators were not pointing to a sustained market rally.

“We remain cautious that any bullish rally . . . may not be sustained with the stochastics now near overbought levels. A breach above the 7,200 resistance allows the index to resume its bullish trend,” it added.

Jason Escartin, investment analyst at F. Yap Securities Inc., said that with or without consideration of the short-term trend, the local market was “not as rosy” based on medium and long-term forecasts.

Even though fundamentals point to more positive market, due to technicals—trading still below 100- and 200-day simple moving average—the current range will likely be sustained, he added.

Escartin said support for this week would be at 7,000. If broken, 6,900 will be likely. The resistance level is seen at 7,150 to 7,200.

On Friday, the benchmark stock index grew by 0.15 percent or 10.34 points to 7,055.74, while the broader All Shares index rose by 0.22 percent or 9.05 points to 4,055.42.